For the Quarter Ending March 2022
Polyolefin Elastomer (POE) market observed another round of price increases owing to continued volatility in energy feedstock prices, globally. On the demand side, consumption of POE has been stable to firm keeping volume offtakes on the stronger side. Supply chains have strengthened since the beginning of the year, which has eased supply fundamentals after volatile 2021. Feedstock ethylene prices have been stable in the regional market as ample inventory levels continue to stabilize the market. As of March 2022, POE prices were assessed at USD 2894 per MT on FOB basis for Extrusion moulding grade POE. Dow Chemical Company, a key producer in the region, continued to face inflationary pressure from rising upstream costs, which prompted them for increased prices for available POE.
Soaring feedstock prices put inflationary pressure on all key commodities in the European market, including petrochemicals. Olefins prices climbed substantially in the wake of volatility in upstream crude oil and LNG prices. The sudden significant rise in olefins has been translated into strong cost pressure on Polyolefin elastomers. Meanwhile, imported POE from Asia remained costly as freight charges increased in the backdrop of rising speculations in the Black Sea region and a resurgence in covid cases in China, which altered normal port and trading activities. Shipping charges got further exacerbated as transit fees on Suez Canal also rose significantly. Hence, after the conclusion of Q1, Polyolefin Elastomer prices were assessed at USD 2610 per MT on FD basis for Butene based POE.
In China, the POE market has improved since the conclusion of the spring season holidays. Market has been optimistic, gaining from increased inflationary pressure and cost pressure. Demand for POE has risen as consumption levels have again become robust, which plunged in the first week of February. Meanwhile, upstream olefin cost has been firm as crude oil values continue to climb globally, and refiners have been forced to keep the prices of olefins and aromatics on the uptrend. Production has been optimum in Far East Asia as no scheduled maintenance has been announced yet, and Q1 has rarely been employed for plant maintenance purposes. This has ensured ample availability of the material in China ports; Ningbo port has observed improved mobility; however, Shanghai port continues to face congestion issues. As of March 2022, POE prices are assessed at USD 2815 per MT on CFR basis for Octene based POE. Indian domestic market also witnessed a similar market trend where POE prices gained consistently throughout the first quarter on the back of robust import prices. Far East Asia and Southeast Asia are among the key exporters of POE to India.
For Quarter Ending December 2021
In Q4 2021, the POE market in North America witnessed a massive demand in the region which resulted in the extensive surge in its prices. The cost of POE in the US market rose to USD 3171/ton. After a few weather-related disruptions in September 2021, the supply of POE resumed with industries increasing the production rates to cater to the demand. However, overall output has not been enough to alter the uprising trend of POE prices during the final quarter of 2021. The constant rise in the energy feedstocks and their derivatives also contributed to the increasing price trend of POE in America during the last quarter of 2021.
Indian POE market surged during Nov 2021 due to the festive season, increasing the demand from the downstream automotive industry. The price of POE was recorded near USD 4000/MT. The prices started to decrease in the last month of Q4 due to the surging production rate in other Asian countries like South Korea. The price dropped to USD 3606/MT in December because of the limited production from India's automotive sector. The Chinese market witnessed a steady price rise despite the increase in production rates from importing countries like South Korea. The price trend was upward due to rationing and dual control norms imposed by the Chinese authorities in the final quarter of 2021. The price trend of POE in the Korean market during Q4 2021 was very similar to the Indian market, where the prices rose till November because of downstream footwear industries trying to restock before peak season, followed by its drop-in December when the production of POE increased in the country.
The price trend for POE in the European Market during the fourth quarter has been declining due to deterred performance of its downstream automobile sector in Europe. The downward movement of upstream Ethylene prices also affected the price trend of POE prices. New passenger vehicle registrations in Europe contracted by 22% in December 2021, which affected the downstream automotive industry and impacted the prices of POE. Weak market sentiments and sufficient product availability slip the price of POE in the regional market. Since POE is largely used as Interior materials in Vehicles, the low demand due to the poor performance of the downstream automotive industry led to ample POE stock.
For the Quarter Ending September 2021
The upward trend in prices of POE continued in the third quarter as well across the North American region owing to the recovery in the global demand. The demand for several grades of POE had been rising in Q3 against the backdrop of renewed demand from the downstream automotive industry. Global POE supplies were seen normalising after a US-based producer returned online after disruption in operations at its Louisiana Operations due to weather related challenges early in September. The prices of injection molding POE and extrusion molding POE were assessed at 3040 USD/MT FOB New Orleans and 2660 USD/MT FOB New Orleans respectively, as of 8th October.
The prices of Polyolefin Elastomer (POE) witnessed a steep rise in the Asia Pacific region during Q3 of 2021. The supply outlook observed an improvement across the region in Q3 due to the increased demand for POE from the downstream industries. In India, POE prices remained buoyant in the first half of the quarter backed by firm offtakes from the domestic market. In September, South Korea’s POE pricing showed limited fluctuations under stable demand trends and lack of purchasing activities from the downstream buyers. Rising crude and surging raw material prices continued to affect the producer’s margins. POE Octene-based FOB Seoul price was assessed at $2300/mt while POE Butene-based assessments were settled around $2510/mt during the week ending 24th September. Leading Korean producer LG Chem Ltd announced on Thursday (19th Aug.) that it will invest around USD 2.2 billion into its PBAT and POE capacities in South Korea which will be commissioned by 2028.
During the third quarter of 2021, the pricing trend of Polyolefin Elastomers (POE) demonstrated an upward trajectory in the European region. The demand remained firm during the third week of September, as market sentiments ramped up after automotive manufactures increased their production to cater to the demand. Due to prolonged production disruptions from carmakers, it is expected that demand will remain under pressure from the automotive sector while the electronic sector will continue to keep market prospects firm in the fourth quarter.
For the Quarter Ending June 2021
US Polyolefin Elastomer (POE) suppliers reported constrained inventory levels even in Q2 that maintained somewhat firmer pricing in June. Manufacturers reported inventory build-ups until later this year and delay in customer orders which could not be met in Q1 due to weather related disruptions in Q1 and early Q2. FOB Orleans POE Injection Moulding rates showed gains to settle at $2195/mt while Injection Moulding grade was assessed at $2540/mt in June. Leading manufacturer Dow announced idling of its three PE and two elastomers production units in the Americas for at least 30 days at the start of May to cap the inventory gains when the demand is slow due to the pandemic. There was sharp pick-up in demand for grades used in automotive parts and upside in construction and infrastructure as well. Strong pricing somewhat reduced the amount of POE exported out of the US with market players keenly observing the reoccurrences of COVID pandemic across various regions of the world.
During the second quarter of 2021, POE supplies in the Asia pacific region were limited due to lesser imports with some supply lags reported as China’s Guangdong port was closed due to the rising COVID cases towards the end of Q2. Some Chinese producers reported due to the power outages. In India the market activities were subdued amidst the resurgence of the second COVID wave which restricted the public movement and economic slowdown. Ex-Works prices for Butene-based POE in India oscillated around USD 2453 per tonne in June. Overall, the Asian Polyolefin Elastomer demand was healthy, with major enquiries concentrated over the automotive and construction sector in the second quarter.
Polyolefin Elastomer supplies in the European region were improved but the overall market outlook remained pressured for a larger part of the second quarter due to limited availability of feedstock and curtailed production margins due to upstream cost pressure. Whereas, the demand surged, amidst the constant offtakes from the automotive and construction sector. The supply demand gap widened, as a repercussion the pricing trend of almost all POE grades was well supported throughout the second quarter of 2021.
For the Quarter Ending March 2021
Polyolefin Elastomers market in the North American region was severely impacted by the seasonal storms which caused power outages and forced shutdowns at several manufacturing plants in the USA Gulf region due to sub-freezing conditions, eventually leading to global material shortage. Regional offers were corrected positively after several polyolefin manufacturers such as Dow Chemicals and Equistar Chemicals announced hike in the prices of almost all polyolefins. A leading POE manufacturer raised POE offers by USD 150 per Mt w.e.f. Feb. 2021 due to soaring transportation, energy and raw material prices. Demand however surged after better offtakes were reported from the automotive and construction sector.
POE supplies were stable during the first quarter of 2021 as the addition of new upstream olefin cracker kept the feedstock availability balanced. However, some constraints were witnessed after the Chinese Lunar New Year holidays as some plants in China went for a maintenance turnaround. Demand showed mixed results, while prices of POE fluctuated during the quarter due to the resurgence of COVID in some parts of the region. The quarterly average of POE rates in Southeast Asia was assessed around USD 2373/ton.
During the first quarter of 2021, the European POE supplies were tight, owing to limited upstream products and feedstocks availability due to sluggish operation in several plants in northwest region amid the cold weather and transport hiccups, followed by the reduced imports from the USA. However, demand witnessed an improvement as the offtakes from downstream automotive and construction sector increased amid pick up in commercial and industrial activities.
For the Quarter Ending December 2020
Majority demand of POEs was generated from the automobile sector. During the final quarter, automotive industry of the Asian countries like China, India and Korea improved significantly. The reason behind this rise was improved COVID 19 situation and festive push from October to December. China automobile industry improved steadily from Q3 and the sectoral growth remained firm in Q4 2020. This rise improved the demand of POEs that led to increase in their price. In the Indian market, Ex-depot price of butene-based POE increased from USD 2341.5 per tonne in October to USD 2367.8 per tonne in December. RenewSys India, POE encapsulant manufacturing company announced that they had increased their POE encapsulant manufacturing capacity from 1.65 GW to 3 GW during October 2020. This expansion is likely to ramp up the utilization of POE-based solar module component production capacity in the coming years.
During the fourth quarter, US faced lower automobile sales compared to 2019, although the demand improved on Q-o-Q basis due to steady recovery from the COVID-19 situation. Several automobile giants like Ford, Volkswagen, Toyota etc. faced acute shortage of semiconductor chips for the auto parts, which forced them to cut their automotive production prompting lesser POE consumption. Many companies in the US expressed interest over investing on POE based encapsulants to improve the efficiency of solar panels amid rising environmental concerns.
New strain of COVID-19 during October in Europe, hit hard the European automobile sector. Sales of automobiles in Europe dropped by 7% on year-on-year basis, thereby affecting the demand of POEs across the region. The region is strongly investing in upgrading its POE-based solar encapsulant technologies with major companies coming up with latest advancements. Due to supply tightness price of POEs remained high due to high demand from automotive and elastomeric shoe soles.